Financing, commodity prices stumbling blocks for proposed open pit mine in New Brunswick
Whatever happened to Northcliff Resources Ltd.’s Sisson Tungsten–Molybdenum project?
It’s been several months since the Vancouver-based junior mining company got approval from the Canadian Environmental Assessment Agency to build the proposed open pit mine—CEAA announced the decision on June 23, 2017. The site of the proposed mine is approximately 100 kilometres northwest of Fredericton, N.B. However, since that time the company has been quiet on the progress it’s made with the project.
The most recent information came in a management discussion and analysis document released in September of 2017. In the analysis, Northcliff made it clear it’s a long way from making a decision to build the mine. “The current focus of project work is to advance receipt of critical mine permits, including the Crown lease, mining lease, fisheries authorization and quarry permit over the next six to 12 months, to enable eventual development of the Project,” the company wrote in its analysis. “Concurrently, engineering studies are underway to optimize the project, and management continues to advance discussions with interested parties to secure offtake contracts, which will be followed by efforts to complete project financing.”
Northcliff plans to build a mine that would produce 30,000 tonnes of ore per day. The estimated mine life would be 27 years and it would employ 300 people. The projected cost to build it is $579 million.
What the company really needs is for tungsten and molybdenum prices to rise. Prices for tungsten, commonly quoted as the intermediary product APT, have been on an upward trend recently compared to 2015 and 2016, but still aren’t as high as they were in 2012. Meanwhile, molybdenum prices have followed the same path. They are rising, but not by much.
The company had a cash balance of $4.9 million as of July of 2017. And, it does have a strong partner in the project—New Zealand-based Todd Group—that has already provided cash to Northcliff for a sizeable stake in the company and the Sisson project. However, it admits it will need to find multiple sources of capital to build the mine.
Global prices for tungsten and molybdenum are slowly recovering after a two-year slump